biofuels

Newsworthy: Ford Motor Co. outlined the next phase of its expansion in China yesterday, with 50 new Ford and Lincoln models going to that market by 2025. There will be at last 15 new electric vehicles under these brands, and the separate Zotye-Ford joint venture will offer a range of affordable all-electric vehicles under a new brand. Sport utility vehicles will be emphasized, with eight new utility vehicles being rolled out under the 50-vehicle launch. Connectivity will play a greater role, with all Ford and Lincoln vehicles in China connected through either embedded modems or plug-in devices by the end of 2019. As for autonomous vehicles, Ford will tap into its board member presence of Chinese company Baidu’s Project Apollo. The Apollo Open Platform will facilitate the development, testing, and deployment of autonomous vehicles, the company said………… Electric bus manufacturer Proterra announced yesterday that Yosemite National Park will add two Proterra Catalyst buses to its fleet. It will be the first U.S. National Park to permanently add zero-emission buses to its shuttle fleet, offering its visitors a modern, ecologically-friendly transportation option, Proterra said. Beginning service in late 2018, the Catalyst buses are expected annually to reduce 887,000 lbs. of greenhouse gas emissions and save approximately $150,500 on maintenance and operating costs for the national park………… Volkswagen AG’s Moia mobility service division yesterday unveiled a six-seater, all-electric minibus that will be deployed in Hamburg during the second half of 2018. The EV will be rolling out globally after the launch, Ole Harms, chief executive of the division, said on Monday at the TechCrunch Disrupt conference in Berlin. Harms expects services using Moia minibuses to replace 1 million cars across European and U.S. cities by 2025. It will start with 200 units and will scale up to about 1,000 in the following years; drivers of the electric minibus will be offered by Moia, as well as the service being offered to fleet operators and municipalities, he said.

Next phase of biofuels: The U.S. Environmental Protection Agency’s announcement on Thursday on the Renewable Fuel Standard volumes brings to an end a long-awaited and embattled regulatory question for biofuel producers and advocates and the oil industry. Here are a few details on the decision:
* 2018 targets require fuel companies to blend 19.29 billion gallons of renewable fuels into the nation’s gasoline and diesel supply, up slightly from the 19.28 billion gallons required for 2017. That breaks down to 15 billion gallons of conventional biofuels like corn-based ethanol, in line with 2017, and 4.29 billion gallons of advanced biofuels, up from 4.28 billion in 2017. For 2019, the agency set a target for biodiesel at 2.1 billion gallons, unchanged from 2018.
* “Maintaining the renewable fuel standard at current levels ensures stability in the marketplace and follows through with my commitment to … upholding the rule of law,” EPA Administrator Scott Pruitt said in a press release.
* “We think this action is bad for U.S. manufacturing and American consumers,” said Chet Thompson, president and CEO of American Fuel & Petrochemical Manufacturers. He said the EPA’s final decision showed it was “bowing the knee to King Corn.”
Biofuels groups such as Renewal Fuels Association praised the decision.
* National Biodiesel Board and U.S. Senator Chuck Grassley of Iowa were disappointed to see an increase in biodiesel levels not included in the new rule.
* Clean Energy Fuels was pleased to see that renewable natural gas was included as an advanced renewable fuel. “Last week the U.S. Environmental Protection Agency (EPA) upheld its commitment to the Renewable Fuel Standard, and particularly renewable natural gas (RNG), thereby giving the market a clear sign of confidence which will result in its continued growth. This action sent a very positive message to those who produce, sell and consume RNG,” said Clean Energy Fuels President and CEO Andrew Littlefair.

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

EPA issues final rules on RFS: The U.S. Environmental Protection Agency (EPA) announced final volume requirements under the Renewable Fuel Standard (RFS) program yesterday for the years 2014, 2015 and 2016, and final volume requirements for biomass-based diesel for 2014 to 2017. EPA set out a goal of 18 billion gallons of renewable fuels overall for 2016, an increase from what the agency had suggested in June but far less than the renewable fuel level anticipated by the statute originally issued in 2007; that law had envisioned 22.25 billion gallons by 2016. The rule finalizes higher volumes of renewable fuel than the levels EPA proposed in June. The final 2016 standard for cellulosic biofuel is nearly 200 million gallons, or seven times more, than the market produced in 2014. The final 2016 standard for advanced biofuel is nearly one billion gallons, or 35%, higher than the actual 2014 volumes. The agency said it formulated this policy based on more than 670,000 comments from the public. The ethanol blend in gasoline went up from 16.3 billion gallons in 2015 proposed earlier this year by EPA to 16.93 billion in the finalized rules; and for next year, the volume increased from 17.4 billion gallons to 18.11. These volumes could bring the gasoline ethanol blend over 10% this year and next, which the oil industry says will raise fuel prices and further damage vehicle engines. Overall, the EPA decision didn’t appear to quiet the debate over biofuels from the oil industry or biofuels producers.

Faraday launching concept car: Chinese startup electric carmaker Faraday Future will unveil a concept car at the Consumer Electronics Show (CES) this January in Las Vegas. Earlier this month, Faraday released a statement saying it would spend $1 billion on a U.S. factory for this production car; it’s expected to be launched as early as 2017. Faraday has a major Chinese investor, Jia Yueting, who founded Leshi Internet Information & Technology, who has a fortune estimated at $7 billion. Faraday now has about 400 employees, and operates out of a former Nissan research facility in Gardena, Calif., next to Los Angeles.

COP21 starts in Paris: Global leaders met in Paris yesterday for the start of the United Nations COP21 climate summit; its ambitious goal is creating an international framework allowing countries to coordinate and gradually strengthen their efforts to fight climate change. It’s been years in the making and the source of much debate over commitments nations will make to reducing climate change and providing financial aid to countries that have suffered damage from it. Nearly 150 global leaders are expected to attend, including Barack Obama, Chinese President Xi Jinping, and Russian President Vladimir Putin. Security will be tight at the conference, a little more than two weeks after terrorist attacks in the city. “What a powerful rebuke to the terrorists it will be when the world stands as one and shows that we will not be deterred from building a better future for our children,” Obama said last week.

Tesla Model X pricing: Tesla Motors’ new electric SUV, Model X, will have a wide range of MSRP prior to its $7,500 federal tax credit. It has a starting price of $80,000 before delivery charges all the way to $132,000 for the Model X P90D Signature Edition. That will include the Ludicrous Mode, which means you can go from 0 to 60 in just 3.2 seconds. Deliveries of the Model X will start in early 2016. The Model X is being recognized for going an estimated 257 miles, which is significant for a battery electric vehicle, and for its “falcon” doors.

Federal rule on sight-impaired pedestrians delayed: The National Highway Traffic Safety Administration has delayed rules that would require electric and hybrid vehicles to alert sight-impaired pedestrians and bicycle riders about approaching cars. That ruling will be delayed until at least mid-March, and sets back hopes that the rule proposed in 2013 would be worked out by now. NHTSA says that the chance of pedestrians being injured in a crash are nearly 20% higher compared to traditional gasoline-powered vehicles.

Hyundai selects AeroVironment: Hyundai Motor America has selected AeroVironment as the preferred provider for charging system installation at its North American dealerships for its all-new 2016 Hyundai Sonata Plug-in Hybrid. Hyundai is the seventh electric vehicle manufacturer to choose AeroVironment as one of its suppliers. Hyundai owners can purchase AeroVironment home chargers and installation when purchasing their vehicles at the Hyundai dealership. AeroVironment-certified, licensed electricians, who are also specially qualified to support EV drivers, perform on-site installation and services.

The California Air Resources Board has ordered Audi, Porsche, and Volkswagen to recall and repair “illegal” emissions software in more than 15,000 vehicles with 3.0-liter diesel engines sold in the state since 2009. This came out of Audi’s recent admission that its 3.0-liter diesels sold since the 2009 model year contained three “auxiliary emissions control devices” that regulate emissions performance that weren’t properly disclosed to regulators. In Germany, Volkswagen Grouphas agreed to recall 2.46 million diesel vehicles fitted with illegal emissions-control software in that nation. Overall, VW has 11 million vehicles globally that may fall under these recalls, with about 8.5 million of them being in Europe.

EV charging in China: To meet China’s goals of being the largest electrified vehicle market in the world, the national government has adopted a five-year plan to expand its battery charging network. In 2014, China had 780 charging stations and 31,000 charging poles (individual chargers). By 2020, the government aims to add 12,100 charging stations and 4.8 million charging poles. Beijing will likely get at least 7,400 charging stations and 2.5 million poles; Shangai is likely to join Beijing in getting more of the charging stations.

Top Li-ion battery suppliers: LG Chem, Panasonic, and Samsung SDI have taken the top position in a leaderboard created by Navigant Research. The research firm anticipates that most new production hybrid and all plug-in electric vehicles will be shipped with lithium-ion batteries in the next few years. Leading companies in the field are large and financially stable companies, or are subsidiaries of these types of companies. They deliver Li-ion batteries to multiple markets, such as the consumer electronics and emerging stationary grid energy storage markets. The majority (72%) of demand for these batteries is expected to come from battery electric vehicles (BEVs), due to the larger battery packs typical of those vehicle types.

Green SUV of the Year:Green Car Journal has announced its five finalists for the 2016 Green SUV of the Year award to be presented at the 2016 Washington Auto Show. Finalists include the BMW X1 xDrive28i, Honda HR-V, Hyundai Tucson, Mazda CX-3, and Toyota RAV4 Hybrid. “After years of focus on building more efficient and environmentally positive sedans and hatchbacks, a growing emphasis is now being placed on SUVs and crossover vehicles, one of the hottest segments in the auto market,” said Ron Cogan, editor and publisher of the Green Car Journal and CarsOfChange.com. The award recognizes this achievement, Cogan said.

The DuPont cellulosic ethanol plant that opened in Nevada, Iowa, on October 30, will be the largest cellulosic ethanol plant in the world. The facility is expected to produce about 30 million gallons of cellulosic ethanol per year from corncobs, husks and stalks that are harvested within a 30-mile radius of the site. Most of this fuel will be shipped to California.

Iowa Gov. Terry Branstad; Sen. Chuck Grassley, R-Iowa; Rep. Steve King, R-Iowa, U.S. Department of Energy (DOE) Bioenergy Technologies Office Director Jonathan Male, senior government officials, DuPont leaders and staff, and local farmers, attended the event. Political leaders paid tribute to DuPont’s efforts to develop the next-generation low-carbon renewable fuel and criticized the U.S. Environmental Protection Agency’s proposal to reduce the amount of ethanol that will be blended in the nation’s transportation fuel supply. (Along with transportation fuel, a partnership between Proctor and Gamble and DuPont will direct some of the cellulosic ethanol from this plant into laundry detergent.)

For the near-term future, DuPont plans to sell most of that fuel in California to help the state meet its low-carbon fuel standard (LCFS). California’s LCFS, along with its quarterly carbon credit cap-and-trade auctions and the resulting Greenhouse Gas Reduction Fund, has become a significant source in government funding for advanced biofuels, renewable natural gas, and renewable diesel. The U.S. Environmental Protection Agency in its May ruling changed course on blended biofuels, which adds ethanol to gasoline and biodiesel into diesel, showing less support for E10 or higher. The EPA is still supporting growth in advanced biofuels, but acknowledged that the volumes are lower than what was originally set by Congress. The proposed rules are set to become final by late November. (And a Moore Information survey conducted on behalf of the National Biodiesel Board found 80% of U.S. registered voters support a national renewable fuel standard to increase biodiesel use in the U.S.) For now, California’s LCFS and available funding is providing more potential for gaining investment and support in clean fuel projects.

If you view the state’s Greenhouse Gas Reduction Fund that’s administered by the California Air Resources Board, you’ll notice that public transit, with rail and bus systems, has been getting most of the funding so far. The Low Carbon Transportation Fund shows much potential for fleets, transportation companies, and infrastructure builders. There’s $230 million in available funds for zero and near-zero emission passenger vehicle rebates; heavy duty hybrid/ZEV trucks and buses; freight demonstration projects; and pilot programs (car sharing, financing, etc.) in disadvantaged communities. Much of California’s recent funding programs are influenced by Senate Bill 535, passed in 2012, directing that a quarter of the proceeds from the Greenhouse Gas Reduction Fund must also go to projects that provide a benefit to disadvantaged communities.

Clean Energy Renewable Fuels, a division of Clean Energy Fuels Corp., has been gaining interest among fleets for its Redeem brand renewable natural gas. Last year, Harrison Clay, president of Clean Energy Renewable Fuels, said that there had been about $10 million in LCFS credits sold for biomethane on the state’s cap-and-trade market.

The City of Oakland, Calif., has taken a similar strategy as DuPont supporting LCFS with its decision to utilize renewable diesel in its fleet. Last month, the first of its fleet vehicles filled up with NEXDIESEL renewable diesel during a gathering of the Public Works Department, its supplier Golden Gate Petroleum, and fuel manufacturer Neste. Oakland will be running about 250 on-road diesel vehicles and 100 off-road vehicles on renewable diesel, according to Richard Battersby, Equipment Services Manager for the City of Oakland. Battersby said that subsidies and support related to California’s low carbon fuel standard offset the higher cost of producing the renewable fuel.

Iowa has been gradually moving away from corn ethanol. It’s the nation’s largest producer of ethanol, and it has become a hotbed for cellulosic ethanol development. In September 2014, POET-DSM Advanced Biofuels, LLC, a joint venture between Royal DSM and POET, LLC, hosted the grand opening of “Project LIBERTY.” The plant converts baled corn cobs, leaves, husk, and stalk into renewable fuel at the cellulosic ethanol facility in Emmetsburg, Iowa. Another company, Quad County Corn Processors, began using a different technology that takes out the corn fiber from corn-ethanol production to make cellulosic ethanol.

Preparation for the building of this advanced biorefinery started in the early 2000s when it began working with DOE’s National Renewable Energy Laboratory on biofuels technology. According to DuPont, the biorefinery has provided many job and financial opportunities for this rural area of the United States. DOE has supported DuPont by funding key bioenergy conversion technologies and collaborating on research and development projects. In total, DOE has contributed more than $51 million dollars to advance various technologies that helped bring DuPont’s new biorefinery to market.

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

The long-dragged-out biofuels standards may be coming to a conclusion. The US Environmental Protection Agency (EPA) said it will propose draft biofuels targets for 2015 by June 1 as part of a lawsuit settlement with oil industry trade groups. The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers had filed a lawsuit stating that EPA delays in setting renewable fuel use requirements have led to uncertainty and volatility in biofuel markets; oil trade groups are tired of dealing with market volatility of Renewable Identification Number (RIN) credit prices, which is part of the Renewable Fuel Standard rules requiring that fuel refiners mix a certain volume of ethanol into gasoline and biodiesel into diesel each year. The EPA has been dragging out defining the rules that it will set for biofuel volumes. Its decision in late 2013 to reduce the ethanol mandate and maintaining the biodiesel mandate led to a wave of public outcry by biofuels producers and anger by oil industry trade groups over the instability and whether the EPA would reduce the biofuels targets.

Tesla Motors continues grabbing our attention. Last fall, it was the Tesla Model S P85D with “P” standing for performance; now, there’s the Model S 70D with more power, longer range per charge, and price tag with $5,000 added. The 70D is an all-wheel-drive Model Swith a 70-kilowatt-hour battery pack, with 240 miles of range and priced at $75,000 before incentives; and it gets 514 horsepower (hp) to all four wheels from two electric motors. That compares with 208 miles on a charge and 380 hp on the base model rear-drive Model S. As for the “D” in Model S 70D, that stands for dual motor, which will be standard.

Henrik Fisker is dropping the Thunderbolt supercar. Former Fisker Automotive co-founder, and previous Aston Martin design director, Henrik Fisker, has settled a lawsuit by Aston Martin against plans to produce the $400,000 Thunderbolt. Fisker claimed it was based on the current Aston Martin Vanquish, a V-12 powered supercar that was to have been modified with custom styling and cosmetic features. Aston Martin says it was too close to the iconic sports car featured in James Bond movies and infringed on Aston Martin’s intellectual property rights. Fisker had shown off the Thunderbolt at the Amelia Island Coucours d’ Elegance car show last month, and said it would be marketed through the Galpin Aston Martin dealership in California.

ClipperCreek releases cost-competitive charging station. ClipperCreek announced availability of its popular LCS-20 EV charging station with a plug, previously available only as a hardwired unit. ClipperCreek released the LCS-20P Level 2 EV Charging Stations now starting at $379 hardwired and $395 with four plug options, the four most common residential 240V supply power plugs.

Elio Motors CEO Paul Elio still needs a few more investors. Elio just spoke at the New York Auto Show and said that to meet the $230 million to begin production of its two-seat, three-wheel fuel efficient vehicle is still falling short – the company needs another $165 million to get these cars on the road. Elio thinks that the $6,800, 84 mpg vehicle is ideal for cost-conscious fleets and consumers. A big question will be whether Elio Motors will be able to qualify for a low-interest loan through the US Dept. of Energy’s Advanced Technology Vehicle Manufacturing program that will be re-launched soon.

Rethink Methane Symposium coming up. Gladstein, Neadross & Associates (which puts on ACT Expo) is launching the inaugural Rethink Methane Symposium on June 9-10 in Sacramento, Calif. It’s focused on helping stakeholders understand how renewable methane from biological and synthetic sources can help California meet its climate protection and air quality improvement goals. Featured speakers will be Hector De La Torre of the California Air Resources Board, Peter Lehner of the Natural Resources Defense Council, Julia Levin of the Bioenergy Association of California, and Alan Lloyd, president emeritus of the International Council on Clean Transportation.

Massachusetts offering more EV rebates. Electric vehicles have been popular enough in Massachusetts to use up the initial $2 million incentive funding. Now Governor Charlie Baker has allocated an additional $2 million to the state’s Mor-EV rebate program. Mor-EV, which stands for Massachusetts Offers Rebates for Electric Vehicles, provides up to $2,500 to state residents who buy or lease electric vehicles.

BMW wants to double plug-in sales. BMW would like to double sales of its i3 electric and i8 plug-in hybrid models this calendar year. The BMW i3 had 6,092 in sales from its launch in May of last year through December; the German automaker would like to double that to 12,000 units sold of its i3 battery electric and i3 REX range-extended small hatchbacks by the end of this year. The i8 was introduced in August and took in 555 in sales last year; that number is intended to be 1,000 this year. BMW is happy to see strong demand for both models, said BMW North America CEO Ludwig Willisch.

GM prepping for redesigned Volt. General Motors says it will stop production of its 2015 Chevrolet Volt in May to reduce US stockpiles and to prepare for the highly anticipated 2016 Volt plug-in hybrid. Production of the redesigned 2016 Volt is expected to start late this summer. The suspension comes from lower-than-expected sales, factory renovations and engineering changes, the company said. Volt sales had dropped 19% to 18,805 units in 2014, and 48% in the first quarter of this year to 1,874 units. In other news, GM is thinking about spending $1 billion to renovate its Tech Center campus in Warren, Mich. GM has asked the city for tax breaks on the project. The Tech Center has been the hub of many projects since the 1950s including hosting a battery lab for electric-drive vehicles like the Volt.

Kevin Wood, project manager for clean transportation, at Center for Sustainable Energy, sees the plug-in and fuel cell vehicle markets taking off right now. They have a proven track record in fleets. While they don’t meet the needs in every duty cycle yet, in passenger vehicles and sedans, there’s no reason to not be looking at these technologies. You can hear his perspective on these plug-ins and fuel cell vehicles, and other alternative fuel vehicles, in this Fleet Management Weekly video.

Extra from this week’s Green Auto Market Extended Edition: How Hawaii has become a significant electric vehicle (EV) marketplace. EVs with strong incentives have their appeal in Hawaii – with destination charges and a higher price for gasoline than any other market in the US, EVs become as, or more, attractive with cost-conscious car shoppers living in the state. Hawaii ranks second in the US behind California in the number of electric vehicles registered in the state, according to figures recently release by the US Energy Information Administration. The adoption of electric vehicles is a key component in the state’s target of reaching of 70% in clean energy by the year 2030. Here’s more on how to subscribe to that weekly newsletter and read all about it, plus a section on clean transportation company publicly traded stocks – and resources to check out on following these stocks and market trends.

The US Environmental Protection Agency decided to once again put off its decision on biofuel production and gasoline blending until next year – nearly one year after deciding to extend that decision on production volume. A deadline wasn’t given, but it’s probably not going to be announced anytime soon.

While government regulations aren’t the only market force determining what happens to a business sector, it appears that the EPA decision on production volume mandates will shape the future of biofuels. That industry, and oil producers and refiners, have placed a massive amount of energy and resources on influencing the federal agency. Reactions to the latest EPA decision have been mixed.

On Friday, the EPA released this statement: “Today EPA is announcing that it will not be finalizing 2014 applicable percentage standards under the Renewable Fuel Standard (RFS) program before the end of 2014. In light of this delay in issuing the 2014 RFS standards, the compliance demonstration deadline for the 2013 RFS standards will take place in 2015.”

The EPA’s announcement on Friday came after it was nearly a year late in issuing its 2014 requirements for the production and use of ethanol, biodiesel, and cellulosic fuels. Oil refiners and producers had been arguing and lobbying hard over how much renewable fuel could be blended into the gasoline supply; and they say that the Renewable Identification Numbers (RIN) credit market system is volatile and costing them way too much money. Automakers have been sending out warnings on the corrosive effect that E15 could bring to engines. Biofuel farmers and producers have been fighting for victory on RFS for increasing the gasoline blend to E-15 and for supporting advanced biofuels, particularly cellulosic ethanol and biodiesel. The EPA held public hearings around the country over the past year where thousands of people made their case for or against the RFS.

The EPA has sent out mixed messages. EPA Administrator Gina McCarthy may agree with automotive engineers sending out warnings that too much ethanol in gasoline will damage vehicle engines. McCarthy has also suggested that the EPA is leaning toward increasing biofuel production in the 2014 rules and beyond. That could be a reference to backing off corn ethanol (such as leaving it at E10) and increasing volumes of advanced biofuels such as biodiesel, cellulosic ethanol, and other fuels coming from algae and biomass.

So, how did industry groups perceive the EPA decision? It’s been a mixed bag, according to Biofuels Digest:

National Biodiesel Board is very frustrated with the delay and sees it undermining the biodiesel industry. While it acknowledges that the decision is complex, it makes no sense that the decision on how volume should be produced has been delayed again. Biodiesel producers have laid off workers, idled production, and some have shut down completely, says Anne Steckel, VP of federal affairs at National Biodiesel Board.

BIO President and CEO Jim Greenwood appreciated the delay in finalizing the proposal with what he considers to be flawed methodology for setting renewable fuel volumes. He’s concerned to see that the delay in the EPA decision has chilled investment and financing of future cellulosic biofuel plants.

Advanced Biofuels Association President Michael McAdams thinks the EPA has recognized that cutting requirements for advanced biofuels would be a mistake. He thinks the EPA has “hit the big reset button.”

Advanced Ethanol Council, Renewable Fuels Association, and Growth Energy are tired of seeing it being dragged out but are confident that the EPA understands it was wrong about its original ruling. The influence of “Big Oil” has been extreme, and the EPA will likely be issuing standards more supportive of biofuels, the groups say.

The American Fuel & Petrochemical Manufacturers (AFPM), speaking for the oil industry, wasn’t too happy about it. “Today’s announcement indicates that the Administration plans to continuously mismanage this program in a manner that equates to playing Russian roulette with the nation’s fuel supply at the American consumer’s ultimate expense,” said Charles Drevna, the association’s president. The AFPM filed a notice of its intent to sue the EPA over its failure to issue the 2014 RFS regulations.

The Environmental Working Group thinks that the corn ethanol blend in gasoline needs to be reduced and that Congress should reform what it calls “our badly broken food-to-fuel policies.” The group thinks that corn ethanol needs to go away and truly “green” biofuels need to be adopted for reducing greenhouse gas emissions.

Friends of the Earth Climate agrees with that argument. “Final volume levels or no, the simple fact is that the statute requires too much climate-busting corn ethanol,” according to Friends of the Earth Climate’s Lukas Ross. “Today’s announcement shows that Congress handed the EPA an unworkable policy. Now it’s time for Congress to step in and fix the corn ethanol problem they created.”

Biodiesel has provided inspiration for many, including the legendary singer/songwriter Willie Nelson. It’s also been enough to motivate his music industry colleague, Neil Young, to roll out the Lincvolt, a biodiesel-powered hybrid. There was also Josh Tickell touring the country in the mid-2000s in his Veggie Van, powered by biodiesel made from cooking oil taken from restaurants. For some, biodiesel has a do-it-yourself appeal; these are people living outside the mainstream and wanting to live outside the power of the oil industry.

But it’s also an industry, one suffering through several blows and challenges. Biodiesel has shot up in production volume, with the federal mandate bringing it from 500 million gallons in 2009 to 1.28 billion last year. Biodiesel producers saw conditions changing in recent years with a federal tax credit expiring, and the US Environmental Protection Agency deciding to scale down the production volume. Nelson’s story is a telling one highlighting the difficulties in succeeding in a new and risky business like biodiesel.

By 2007, Willie Nelson became committed to biodiesel in a book he’d written and through releasing his BioWillie biodiesel product. Having been an organizer of farm aid fundraising concerts since the 1980s, Nelson saw biodiesel as a logical continuation. BioWillie would help “reduce our dependency on foreign oil while simultaneously saving the American family farm,” he said.

Nelson had joined the board of Earth Biofuels, a Dallas company that left a trail of unpaid debts, delayed securities filings, and disgruntled investors. He forfeited six million shares of stock to resign in 2007. In 2008, Nelson and his business partners transformed a landmark truck stop on Interstate 35 in Texas into Willie’s Place, a biodiesel theme park. People stopped for the fuel and to view Nelson’s display that included gold records and occasionally a chance to meet the legend himself.

To come up with funding, Nelson and his partners took out a $4.75 million loan to finance construction of Willie’s Place. The group defaulted on the loan and Nelson put up $35,000 of his own money to make a payment. Willie’s Place was sold in 2011 during foreclosure proceedings.

Nelson, at 81 years old, has not given up on biodiesel. He has an ownership stake in Big Island Biodiesel of Hawaii and SeQuential-Pacific Biodiesel of Salem, Ore. Nelson also controls the trademark for BioWillie, sold at pump stations on the islands of Maui and Hawaii.

The grand opening of one of the world’s first cellulosic ethanol production facilities has given hope to the biofuels industry and to supporters of biofuels as an alternative to oil. The biofuels industry faces imminent changes from the US Environmental Protection Agency (EPA) on the Renewable Fuel Standard that will reduce production of ethanol and advanced biofuels. The EPA recently sent its revised rules to the White House for review and approval. A new advanced biofuels plant in Iowa shows an industry weathering diminishing government and public support, while also taking steps forward with investors and regional markets.

POET-DSM Advanced Biofuels, LLC, a joint venture between Royal DSM and POET, LLC, on Sept. 3 hosted the grand opening of “Project LIBERTY.” The plant converts baled corn cobs, leaves, husk, and stalk into renewable fuel at the cellulosic ethanol facility in Emmetsburg, Iowa. Those present at the ribbon cutting included His Majesty Willem-Alexander, King of the Netherlands, US Secretary of Agriculture Tom Vilsack, Iowa Governor Terry Branstad, and thousands of guests.

At full capacity, the plant will convert 770 tons of biomass per day to produce ethanol at a rate of 20 million gallons per year, later ramping up to 25 million gallons per year. Fuel from Project LIBERTY represents a greenhouse gas reduction of 85% to 95% over gasoline. It will consume 285,000 tons of biomass annually from a 45-mile radius of the plant. The plant employs more than 50 people directly, and biomass harvesting is creating another 200 indirect jobs in the community. Hundreds of people were involved in the construction of the plant.

“Some have called cellulosic ethanol a `fantasy fuel,` but today it becomes a reality,” said Jeff Broin, POET founder and executive chairman. “With access now to new sources for energy, Project LIBERTY can be the first step in transforming our economy, our environment and our national security.”

POET considers the cellulosic ethanol facility to be a huge step forward in the wider adoption of biofuels, both in North America and around the world. “It is also a victory for the Renewable Fuel Standard (RFS), which prompted increased investment into advanced biofuels that accelerated development of this new technology,” according to the press release.

The cellulosic ethanol plant isn’t the only biofuels investment seeing significant investment support lately. The challenges are there for regaining support for biofuels in the US. Freedonia has addressed the economic issues in its latest World Biofuels Report – which expects global biofuels to top 115 million metric tons in 2018, and will be up from 96.30 in 2013. As for the US, Freedonia has a less optimistic vision: “Healthy growth will be experienced in all regions with the exception of North America, where conflicting government regulations and waning public support in the United States — the world’s largest market for biofuels — will limit advances.”

Alternative energies are having an extremely tough time of it lately – from alternative fuel vehicle fueling and charging infrastructure to development of renewable energies – public and private funding has been drying up for many projects. Biofuels have been going through the wringer – much of it tied into the struggle over corn ethanol being used as E10 in gasoline and potentially as E15 if it survives the political battle. Much of the controversy is also tied into the federal Renewable Fuel Standard, which many analysts think is quite unrealistic for bringing advanced biofuels into transportation at a large scale level of production. A few of the public companies have lost their market value as disappointed investors have pulled out and put their money into something else like smartphones and mobile applications.

Then there’s Vinod Khosla, one of the leading venture capitalists out there these days. Khosla hasn’t backed away from biofuels and is dropping down more cash on cellulosic biofuel producer KiOR Inc., He committed personally to fund up to $25 million in cash to KiOR, in addition to the $25 million that would come from his firm Khosla Ventures.

KiOR just announced that it will be doubling production at its Columbus, Miss., cellulosic fuels facility through setting up a second plant incorporating its own commercially proven technology. The company estimates that the development project will cost it $225 million; it will take 18 months to complete after breaking ground and the company is raising equity and debt capital to fund the construction project.

Khosla and other investors have seen biofuel companies take a deep dive on the market. Amyris Inc., Gevo Inc., and KiOR experienced collapse since their initial public offerings. Operational and technical delays have caused investors to pull away. It’s possible the Khosla could be part of bringing KiOR back and his company has made sizable investments in Amyris and Gevo.

Khosla believes biofuels could play a vital role in America’s economic prosperity and security. “The biofuels industry, if properly funded, is also capable of creating more jobs, with unsubsidized economics, than traditional fossil oil technology and putting every mill town in America with a shut down paper mill back in business as a thriving community,” Khosla wrote in the KiOR statement.

The US Dept. of Agriculture has played a key role in supporting biofuels and has now placed a new offering on the table. Farmers and rural businesses in 22 states are being offered incentives to help reduce energy consumption and increase the use of renewable technologies; a number of biofuels- and biomass-related projects are part of the federal program. The Rural Energy for America Program (REAP) program provides a grant for up to 25% of eligible project cost plus additional funding in the form of a loan guarantee.

Some of the available grants include those supporting flexible fuel pumps in California; E85 and biodiesel blender dispensers in Iowa; equipment to efficiently manufacture biodiesel and a biomass burner in Indiana; and two separate biomass boilers in New York.

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Jon LeSage serves as Editor and Publisher of Green Auto Market, which tracks the business of green cars, fuels, and technologies. Jon also serves as Automotive Editor, Green Initiatives at Automotive Digest. He’s passionate about – obsessed! – with this burgeoning global industry that has huge geopolitical, environmental, energy, and economic issues hovering around it.